Evergy, Inc. (NYSE:EVRG) Q3 2023 Earnings Call Transcript

And the third is around the time and recovery of capital. So those will be areas that we’ll be focused on. Specific things we’ll likely look at include — we have plans to build natural gas generation for reliable hydrogen capable dispatchable generation in both states. So mechanisms to support that build-out will be an area of focus. And then on your question about allocation of capital, obviously, we will shape our capital plan always to meet the requirements of our jurisdictions for reliability and to meet our customer needs, but the incremental opportunities to invest, we think we’ll benefit customers that will position us to capitalize on economic development opportunities. We’ll shape that capital plan based on the mechanisms and policies that we see in the respective states.

Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Nicholas Campanella with Barclays. Your line is open. Please go ahead.

Nicholas Campanella: Hey, good morning. Thanks for taking my questions. I guess just to follow up on some of Shar’s questions. Like I think as you kind of look at the glide path through 2026, it implies something linear. But just how should we think about 2024? Can you kind of grow within this 4% to 6% range into 2024 as we kind of handicap what your earnings would be there? And is this CAGR linear? Or is it more lumpy? Thank you.

David Campbell: Exact. So obviously, we’ll give our 2024 guidance on the year-end call. So we’re not giving annual guidance at this time. But with the — what we’ve described previously and with the mechanisms we have now, we don’t we’ll have the impact of the Kansas rate case, of course, impacting 2024. We mentioned that we’re planning to file a rate case next year in Missouri West. That will be the rate case that we pursue that will impact rates in 2025. So you can expect in the cadence that I described roughly over two years more active regulatory calendar in calendar year 2025 and in fact 2026. So if the lumpier outcomes are often related to rate case outcomes in our — we only have one of our jurisdictions going through a rate case next year. So we obviously know the importance of stable execution within the growth rate range, and we’ll give more details on the 2024 guide in the year-end call.

Nicholas Campanella: Okay. Great. And then I acknowledge that you’re kind of taking down the growth rate today and you have had some headwinds in Kansas. The mechanisms obviously aren’t as constructive to deploy capital. But on this new plan, can you still do 6% rate base growth like prior plans? Or is that subject to change as well? I’m just acknowledging the comments I think Kirk said there’s been a little bit of an acceleration even in ’23, and you continue to highlight a lot of economic development. Thank you.

David Campbell: It’s a good question. I do think that we — our target growth rate range we described for rate base, we expect it will be in the 6% annual range. That is reflected in the capital plan that we published last year, and we always update that on the year-end call. It’s part of a process we actually established in our jurisdictions following the merger. So we’ll stick to that time line. We see significant incremental potential investment opportunities that we’ll evaluate, but we will evaluate those in the context of what makes the most sense in terms of the policies and mechanisms that are in place in our states, and we’ll allocate capital accordingly. So our — we anticipate and we’ve shaped our plan to reflect that estimated rate base growth range.